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Lawmakers meet, mull over tax deal for Nike

By Jonathan J. Cooper Associated Press

Posted:
12/14/2012 11:12:05 PM MST

Updated:
12/14/2012 11:26:35 PM MST

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The Oregon House meets in Salem, Ore., on Friday, Dec. 14, 2012 to consider a tax deal requested by apparel giant Nike Inc., in exchange for bringing hundreds of new jobs. The governor called a special session that will cost taxpayers $13,000 a day, and is evidence of the lengths Oregon will go to protect its best-known company. (AP Photo/Jonathan J. Cooper)

SALEM, Ore. -- A deal proposed by Nike Inc. to create hundreds of jobs in Oregon in exchange for a guarantee that the state won't change a favorable corporate tax structure prompted state lawmakers to start debate in an emergency session Friday.

Critics have questioned the timing and purpose of the special assembly, but rather than head out on holiday vacations, the state's part-time legislators are in Salem to consider whether to give the world's largest athletic shoe and apparel company the assurances it's demanding.

The talks stand as evidence of the lengths Oregon leaders will go to in order to protect the state's best-known company, and the economic footprint, with its trademark swoosh, that it has in the state.

The Oregon House meets in Salem, Ore., on Friday, Dec. 14, 2012 to consider a tax deal requested by apparel giant Nike Inc., in exchange for bringing hundreds of new jobs. The governor called a special session that will cost taxpayers $13,000 a day, and is evidence of the lengths Oregon will go to protect its best-known company. (AP Photo/Jonathan J. Cooper)
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Jonathan J. Cooper
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"We have a wonderful, wonderful company that's going to be remaining in Oregon because of what we're doing here today," said Democratic Sen. Ginny Burdick of Portland.

Gov. John Kitzhaber's decision to call the special session stunned lawmakers who didn't see it coming, underscoring that even as tax incentives have become a common tool for politicians to lure large employers, Nike's deal is unconventional.

The meeting will cost taxpayers $13,000 and came less than two months before the regular legislative session was set to convene. It is aimed at maintaining the status quo, rather than approving new tax breaks.

Such factors led Kitzhaber to acknowledge the emergency legislative session was "extraordinarily awkward.

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Still, Nike plans to create 500 or more jobs and invest at least $150 million in an expansion if the so-called "single sales factor" tax benefits remain in place, according to the Democratic governor.

It's unclear whether Nike would actually move to expand outside of Oregon -- a company spokeswoman refused to say -- but the mere threat was enough to prompt action.

The prospect of many new workers is critical in a state that has no sales tax, limited property taxes and relies heavily on income tax, said Republican Rep. Vicki Berger of Salem.

Nike employs thousands of people in Oregon, many of them at its headquarters in relatively high-wage jobs, including legal, design, sales, information technology and corporate strategy.

The company's presence near Beaverton, a Portland suburb, has helped make the area a hub for athletic and outdoor apparel companies. Columbia Sportswear's global headquarters is in Beaverton, and Adidas has its North American headquarters in Portland.

Nike has deep roots in Oregon, where it was created in the 1960s by a former middle-distance runner and his college track coach. Together, Phil Knight and Bill Bowerman built the company into one of the globe's most influential brands.

Knight also is the largest contributor to University of Oregon athletics, and his money is considered a key factor in vaulting the school's football program into national prominence.

Kitzhaber has said Nike approached his staff about a month ago, saying the company was being courted by other states but would expand in Oregon if officials promised to keep in place the substantial tax benefits for companies that employ many people in Oregon but sell most of their goods elsewhere.

The legislation being considered would authorize the governor to give Nike that promise.

A handful of people opposed to the legislation set up anti-Nike signs in front of the Capitol as lawmakers met inside.

"You cannot do this in such a rushed manner, and this is just not an emergency," Susan Barrett of Portland told lawmakers.

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